Key takeaways from the International Sustainability Standards Board (ISSB): Your questions answered

The ICD’s National Conference was held on June 4^th and 5^th, with this year’s theme being “The Confident Board”.  Participants heard about the importance of Boards’ having confidence to lead their companies to success as directors face an unprecedented degree of uncertainty, change and risk. The plenary and breakout sessions brought together incredible expertise on an array of topics to give delegates the knowledge and engagement opportunities to feel more confident and equipped in the boardroom. 

One of the sessions, titled International Sustainability Standards Board (ISSB)- Your Questions Answered, was intended to increase the confidence of directors around sustainability reporting. Awareness of ESG and net-zero goals spurred businesses to report on sustainability, which led to complex reporting frameworks. ISSB provides corporations a path to make their way out of an alphabet soup of reporting frameworks and towards a more standardized approach.

The session was moderated by Rosemary McGuire, Vice President of Research, Guidance and Support, CPA Canada, and the panellists included Samantha Hill, Managing Director, Head of Sustainability Integration, CPP Investments, Michael Jantzi, ISSB Board Member, Founder, and former CEO, Sustainalytics, and Barbara Stymiest, Corporate Director, non-profit and advisory boards.  The panel discussed practical steps boards can take to guide successful adoption of the ISSB standards and unclear disclosures.

According to Rosemary, this panel discussion was important as the momentum towards global standardization of mandatory climate and sustainability reporting continues to pick up, amidst heightened scrutiny over ESG matters generally.  Jurisdictions representing nearly 55% of global GDP are on a pathway to adopting sustainability disclosure standards issued by the ISSB.  This includes Canada, which is inching closer to mandatory reporting with the Canadian Sustainability Standards Board (CSSB) issuing for public comment earlier this year its first two proposed disclosure standards based on the ISSB standards. 

This changing landscape has significant implications for directors’ responsibilities.  The panel discussion highlighted that a critical first step for boards is identifying and assessing ESG matters most relevant and material to the organization and evaluating the implications for strategy and risk.  To ensure appropriate oversight, governance structures may need to evolve and boards need to satisfy themselves that the appropriate systems, controls and processes are in place to support enhanced internal and external sustainability reporting.  This is a natural extension of the audit committee’s role as the underlying process will likely be very similar to the broader financial reporting that audit committees already oversee.

As sustainability is such a rapidly evolving area, for boards to be confident in their sustainability reporting, it will undoubtedly require that they build their knowledge and capacity to stay abreast of important developments.  For example, Rosemary points out that areas like nature and human capital are garnering increased attention and will likely make their way into future standards.